The American court system actually consists of fifty-one separate court systems. The Constitution established the federal court system. Each state has its own court system. While each system has slightly different rules and procedures, they all follow the basic structure of trial courts and appellate courts. Within this court structure, there are limits on the type of dispute each court can decide.

The authority of a court to decide a dispute is called the jurisdiction of the court. A court that lacks jurisdiction cannot decide a legal dispute. The jurisdiction of a court has three components — geographical jurisdiction, personal jurisdiction, and subject matter jurisdiction. The absence of any one of these components deprives the court of the authority to decide the legal dispute.

Geographic Jurisdiction

Geographic jurisdiction refers to the authority of the court to act on disputes that occur within a defined geographic area. The specific jurisdiction of the court depends on the type of court.

The courts with the broadest geographic jurisdiction are the highest courts in the court system. These courts have jurisdiction over all matters arising in that court's system. For example, the supreme court of a state has jurisdiction over all legal disputes arising within the territorial borders of the state. The Unites States Supreme Court has geographic jurisdiction over legal disputes arising within the boundaries of the United States.

Lower courts may have limited geographic jurisdiction. Many state court systems establish trial courts that only have authority within a specific county. Some states utilize intermediate courts of appeal that only hear appeals from within a defined district within the state.

Personal Jurisdiction

Even if the dispute arises within the geographic jurisdiction of the court, it still may lack authority to decide the dispute if it has no jurisdiction over the parties. The ability of the court to resolve a dispute in a manner that is binding on the parties is defined by the court's personal jurisdiction over the parties.

Personal jurisdiction can be established in two ways: a party can voluntarily submit to the jurisdiction of the court or the court can acquire involuntary jurisdiction over a party. Voluntary personal jurisdiction is primarily used to describe the jurisdiction over the party who begins the lawsuit. That party, usually called the plaintiff or the petitioner, chooses the court that will decide the legal dispute. Even if the court would not have personal jurisdiction over the plaintiff, the commencement of a lawsuit is an implicit agreement to abide by the decisions of the court.

Involuntary personal jurisdiction is more complicated. The court must have personal jurisdiction over the person responding to the lawsuit, usually called the defendant or respondent. Involuntary personal jurisdiction over defendants is established by service of process on the defendant while the defendant is within the territorial jurisdiction of the court. Service of process is easily accomplished if the defendant is a resident of the jurisdiction or regularly does business in the jurisdiction. Establishing involuntary personal jurisdiction over other persons depends on the ability of the court to extend its authority outside its geographic boundaries by means of long-arm statutes. The Constitution strictly limits the scope and effect of long-arm statutes.

Subject Matter Jurisdiction

All courts have limitations on the kinds of legal disputes they can decide. These limitations are based on the subject matter of the dispute. A court without subject matter jurisdiction cannot decide a legal dispute even if the dispute arose within its geographic jurisdiction and the court had personal jurisdiction of the parties.

The subject matter jurisdiction of the court comes from the authority granted to it under a constitution or by statute. A challenge focuses on any limitations in the court's authority imposed when the court was created. There are five types of subject matter jurisdiction:

• Original subject matter jurisdiction. The court is the first one to hear the legal dispute. Courts of original jurisdiction are always courts charged with the responsibility for finding facts. A court of original jurisdiction may have other limits on its subject matter jurisdiction as long as it resolves the legal dispute first. Trial courts are courts of original jurisdiction.

• General subject matter jurisdiction. The court can hear any kind of legal dispute, no matter what the subject matter. Courts with general subject matter jurisdiction exist in both state and federal court systems. A court of general subject matter jurisdiction does not have to be a court of original jurisdiction; an appellate court may have general jurisdiction over appeals that arise in its geographic area.

• Limited subject matter jurisdiction. The court can only hear particular kinds of disputes. Small claims courts are courts of limited subject matter jurisdiction because they can only hear cases of a certain value.

• Exclusive subject matter jurisdiction. Only this court is able to decide a certain type of legal dispute. These courts are sometimes called specialty courts because they are established to devote specific legal expertise to a particular type of dispute. Many states have courts devoted to deciding disputes involving tax, workers' compensation, or housing matters. A court of exclusive jurisdiction can also have original or appellate jurisdiction over the subject matter. When a court has exclusive subject matter jurisdiction, no other court is allowed to decide disputes involving that subject matter.

• Appellate subject matter jurisdiction. This allows review of the decision of a court of original jurisdiction. An appellate court may have the authority to hear appeals on any kind of legal dispute (general jurisdiction) or only be allowed to hear appeals in a particular area of the law (limited or exclusive jurisdiction).